Last month saw the close of one of Dubai’s first celebrity chef restaurants “Verre” by Gordon Ramsay; it will be reopened in the same location by two of his hardworking and talented protégées as “Table 9”. My question is whether this makes sound business sense given the shifting sands of Dubai’s retail hubs and whether enough time has been dedicated to market research. Sometimes it makes sense to look a gift horse in the mouth. Verre, Gordon Ramsay’s first international restaurant opened in 2001 and is located in the Dubai Creek Hilton. The Dubai creek which divides the areas of Bur Dubai and Deira played a large role in shaping the fortunes of Dubai Emirate. After dredging in 1961 and again in the 70’s, the creek was established as a major commercial hub and gold re-export reinvigorated the fortunes of the Al Maktoums allowing them to develop Dubai’s infrastructure. Later establishment of the Jebel Ali Port and free zone shifted the focus of trading activity from the creek and today only traditional dhows offload in this historic centre.
In the ten years since Verre opened Dubai has rapidly expanded with new urban centres, megamalls and hundreds of restaurants to choose from, offering international cuisine to fit all pockets. Dubai residents that may be Table 9’s target market now mostly live within easy reach of the popular Madinat Jumeirah, Dubai Mall, Downtown Dubai and Jumeirah Lake Residence areas and more often than not would dine out there to avoid traffic. Although not privy to Verre’s table bookings (and not planning to steal the reservation book), I would venture that this geographic isolation coupled with the expense of dining there in the economic downturn has impacted on their profits over the last few years. Only time will tell whether the award winning chefs and their more affordable menu is attractive enough to pull in the punters.
Similar mistakes and insufficient market research have led to the opening and swift closing of many restaurants. Spice Lounge at the end of Al Wasl road which offered high end Indian fusion fare and failed to compete with more established restaurants like the ever popular Ravi, currently is under renovation. Unsurprising, given the low income demographics of this area and overwhelming value choices available.
Market research could help avoid mistakes and act as a base for your marketing strategy; it might even reveal how bad your business idea is. You need to know which customers are likely to buy your product, determine if there are enough of them for your business to make a healthy profit and whether their needs are being fulfilled by a competitor. Market research information helps you develop short and long term plans and reduce your business risks especially in a competitive multicultural environment. Arthur Conan Doyle said – “It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.”
Of course many successful entrepreneurs act instinctively and would hate to stifle creativity with crushing statistics but the best are also risk avoiders. ISM training will be running a Market Research and Intelligence course on the 7th December, please contact firstname.lastname@example.org for more details.